Interesting Income & Tax statistics

[plural]

Source 1 & Source 2

Average Pre-tax family income by percentile
(in projected 1999 US Dollars)

The Wealthiest 20% of Americans (23.6 Million families) earn an average of $132,000 per year
The Upper Middle Class 20% of Americans (22.6 Million families) earn an average of $53,000
The Middle Class 20% of Americans (22.5 Million families) earn an average of $35,400
The Lower Middle Class 20% (23.3 Million families) earn an average of $21,200
The Poorest 20% (22.7 Million families) earn an average of $8,400

The national average for all (116 million) families is $49,500

The Wealthiest 1% of Americans (1.2 million families) earn an average of $719,000
The Wealthiest 5% of Americans (5.9 million families) earns an average of $276,000
The Wealthiest 10% of Americans (11.9 Million families) earns an average of $188,000



Who shoulders the burden?

Legend


Income Tax Burden (1977-1995)


1999 Projected Tax Burden




or to put it more succinctly

out of every income tax dollar that is collected

the poorest pay 1 cent
the lower middle class pay 5 cent
the middle class pays 11 cents
the upper middle class pays 19 cents
and the wealthiest americans pay 65 cents

the wealthiest one percent of americans (or 1.2 million families)
pay 21 cents out of every income tax dollar collected

as much as I am not a big fan of Bush
I have to admit these numbers
make his tax cut plan seem quite a bit more fair

The wealthiest 20% earn roughly 53.7% of the taxed income
but pay 65% percent of the income tax collected

80% or roughly 91.1 Million American families
earn 46.3% of the taxable income
pay 35% of the income tax collected

20% or 23.6 Million American families
generate 116% of the income of the other 80%

Each of the 23.6 million wealthiest american families
generates on average 2.276/million% of the total income in the US

While the remainder of 91.1 million familes which makes up for the rest of you
generates on average 0.5/million% of the total income in the US

Whichs means that average wealthiest family (20%) generates 4.5 times
the income of the average american family (80%)

The Average 80% family pays 0.38/million% of the income tax collected
The Average 20% family pays 2.75/million% of the income tax collected
or 7.25 times as much as the rest of you.

So while they earn 4.5 times as much as you
They pay 7.25 times as much in taxes

This points to a fairly large income gap in the US
and while depending on your politics
you may feel it is the deserved result of industrious
or a sign of larger social problems




Below are the numbers which I used for the total and per capita income % statistics
which were generated by multiplying the average income for a group
by the population of that group to obtain rough total income for the populations
[yes I am aware of the inadequacies of the method, but it accurate enough]


$3,115,200,000,000 Highest Quintile
$1,197,800,000,000 Fourth Quintile
$796,500,000,000 Middle Quintile
$493,960,000,000 Second Quintile
$190,680,000,000 Lowest Quintile

80% subtotal
$2,678,940,000,000

Total:
$5,794,140,000,000

Comments

[trishylicious.livejournal.com]

the only problem is that the wealthiest 10-15% control the incomes of about the 75% or more of the rest... if incomes were distributed more evenly, then more people could pony up a better part themselves and the disparity might not be so large. I'm not saying every single rich person is taking advantage of every single poor person, but for the most part, many of the upper classes employ the lower-classes with low-paying jobs that barely allow them to make ends meet.

[plural.livejournal.com]

actually

according to the government statistics provided above, the wealthiest 20% recieve only 53.7% of the income taxed, however they pay 65% of the tax.

now personally, I think our progressive tax system is a good one, but it surprised me just how much the "bitching" was unfounded

[trishylicious.livejournal.com]

I read what you wrote and at first I thought, "Oh wow!" but then I thought about it from a different perspective and replied ~

what I mean is that the wealthiest people, even though they might end up paying the most tax in the end, still control the incomes of many of us who aren't lucky enough to be as prosperous as they are.

e.g. 53.7% of $1,000,000,000 = $53.7 million take home pay
65% (35% tax bracket) of $1,000,000 = $650,000 take home pay
67% (33% tb) of $250K = $167.5K take home pay
72% (38% tb) of $100K = $72K take home pay
75% (25% tb) of $40,000 = $30,000 take home pay
85% (15% tb) of $15,000 = $12,750 take home (barely enough to live)

The people making $15K, $25K, $40K are often at the mercy, jobwise, of the people making lots of dinero. Most of the big income makers are probably big bosses of huge companies - e.g. employers. (Whereas the lower-paid people are often employees, although there might be some independent workers in there.) If the higher-paid people wanted to pay less taxes, they could pay their employees more to distribute the burden better. $650,000 is about 50x more than $12,750.

that's all I was saying. :)

[trishylicious.livejournal.com]

oops wrote 38% where i meant to type 28%

p.s. i just meant this to provoke a discussion, not to pick on you. :)

[plural.livejournal.com]

*grin*

yeah I figured it was a typo

and

excellent cause thats why I posted it in the first place *smile*

[plural.livejournal.com]

ahh

yeah I see what you mean

of course there is two problems there

one is that people will object to higher taxes even if they make more money

and considering 80% of the country pays roughly a third of the cost of government

getting those 80% to agree to a tax hike is unlikely

secondly, in order to make it worth while to the wealthy, it would have to be a net gain for them, and still provide the necessary tax base to the government.

the way taxes are currently structured, with your employer paying payroll taxes based on aggregate of their employees salaries, trying to increase the tax base by increasing salaries would be prohibitively expensive.

[budhaboy.livejournal.com]

Honestly, I expected more from you.

1) what is a progressive tax:

bleeding heart spin
-------------------
Considering tax burden on the amount of GROSS tax paid vs. GROSS income (GI) earned is folly, as you should be considering the amount of tax paid as a percentage of 'disposable' income (DI) where DI=GI-S (that is the gross income-minus what you need to survive). This is the motivating factor having a progressive income tax, because the 'rich' are most certainly able to 'afford' to pay more. The question here, of course is how much is 'what you need to survive'. I hear tell of some folks formerly of the pacific NW who regularly smoked $200 cigars... Are those necessary to survive? What about the poor bastard coding in SF for $60k/year but can't find a decent place to live? How does he compare to some lawyer making $60k/year living in butfuck Iowa who lives in an ancentral mansion?

heartless free-market spin
--------------------------
Let's consider this idea of 'disposable' income for a minute. Where does it come from? Most rich folks don't get their money selling crap to other rich folks... They get it from selling crap at high profit to poor folks. If you decrease the tax burden on the rich (increasing in the sort term their disposable income), you will utimately take a larger bite of the percentage of disposable income available for the poor folks (whose backs the rich live off of), making them less able to buy the latest GI joe with the kung fu grip. This will utimately lead to a decrease in revenue, and ultimately profits (and their long term disposable income).

2) Your numbers aren't comparing things to support your argument

Dubya's tax cuts don't affect people making less than 200K/year (or the top 5 percent of the earners... What is the distribution of income/taxes paid in this subset of the one you used for your analysis? That is do they really pay such a large portion of the tax pie? I doubt it...

[plural.livejournal.com]

first off, I wasnt really making an arguement, mostly I was just surprised as I had always assume that the quote/unquote middle class payed the lions share of the taxes. Most of the number crunching was to get to satisfy my own curiousity and get a few different ways to look at the situation, I was in no way arguing against a progressive tax or in favor of Bush's plan, but I did think that in light of this sorts of information, some of the criticisms seemed less valid. as it just seemed to me that if the government was making quote/unquote refund of excess tax collected, then it should go to those who paid it.

whether the government should do that is a seperate question.

As for the distrubution of income/taxes in my analysis, I used rough estimations to generate a quote/unquote GDP type figure comparison between the top 20% and the bottom 80%

As for them really paying such a large portion of the pie, the CBO reported that in the tax year referrence (1995 I believe) 65 cents of every income tax dollar collected were from people who earned an income placing them in the top quintile of society, which seems pretty clear cut.

[budhaboy.livejournal.com]

I still think it's silly... I'd like to see a study of how much of governmental resouce is used up by those same 20%. I'm guessing, given their longer lifespan (they'll use more medicare), and broader investments (they were the ones that got the lion's share of say the S&L bailout... not to mention the SEC oversight to protect them from themselves), and 'better' local services (who's house is more likely to burn? the guy making $30k or the guy making $300k?).

Also, how do you reconcile your back of the envelope calculations that seem to suggest that the pay disparity between rich and poor is about 4 times (that is, those in the bottom 20% to those in the top 20%), when there are other studies that suggest the gap between CEOs and their workers jumped to something closer to 200 times (from about 20 in the seventies)?

I'm guessing you are masking some really profound outliers when lumping the whole shebang into quintiles.

I guess all I'm saying is it doesn't surprise me. Further, I have perfect faith in the free market (that is: if it was really a burden those that paid wouldn't)

[thoughtgolem.livejournal.com]

1. You can't give numbers for one type of tax and then use them as the sole basis for a discussion about the tax burdens of the economic classes.

2. Federal taxes (for the most part) go towards improving and maintaining our quality of life. Anything from military protection to infrastructure maintenance to international diplomacy. Let's see some graphs on who enjoys the highest quality of life, as well as who most benefits from a healthy military and infrastructure and good international relations.